Hot Times in 'Silicon Vineyard'

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Hot Times in 'Silicon Vineyard'

The $100-million acquisition of an upstart company in a remote Canadian city is drawing attention to a little-known area of British Columbia known as the Silicon Vineyard – as well as to the self-taught engineer who gave the region its name.

Packeteer of Cupertino, Calif., recently scooped up Workfire Technologies International of Kelowna, British Columbia, in an all-stock deal. What Packeteer found attractive in the 20-person company is its Internet acceleration software that uses what Workfire calls "genetic caching" to speed Web pages to users' computers.

Workfire's software is designed to figure out the type of content, speed of access, and type of browser in use so that it can automatically adjust delivery speed in real time to a computer desktop. Workfire's software was named one of the top three new technologies at Comdex last year.

Packeteer hopes Workfire's software will give it an edge in the competitive Internet traffic market, where routing speed and swift content delivery are critical for their ISP customers.

Workfire's acceleration software is supposed to increase the delivery speed of Web pages up to 100 percent. "You reduce the size of the data, you improve the rendering speed and you improve the stickiness of your customer," Taylor said, "so it's a win-win all the way through."

But the biggest winner of all in the Workfire deal is undoubtedly Taylor, who has a string of startups and sales to his name. Taylor's previous companies include MSound, which manufactures a digital signal processor-based sound system and was sold to Sierra Semiconductor; Timespan, a builder of touch sensors, sold to Tanisys Technology; and Chameleon Bridge Technologies, an Internet multimedia firm acquired by PeakSoft.

After Comdex, Workfire was besieged by investment bankers and venture capitalists who wanted to know more about the company with no revenues and a product still undergoing testing. A banker led Packeteer to Kelowna and Workfire.

Taylor said the sale of Workfire made a lot of sense as an alternate to an IPO. He will stay on at Packeteer as chief technical officer of the acceleration products division, which will continue to be located in the city of 120,000.

Taylor, 37, might sound like the man with the Midas touch, but he downplays his accomplishments. "I've done very well over the years, but Workfire was the first technical and business success," he said. "To ring the cash register to the tune of $100 million is in a different kind of league."

His previous companies have sold for $1 million to $2 million each, and only after he made "every possible mistake an Uber-geek can make," Taylor said.

Taylor dubbed B.C.'s lush Okanagan Valley the Silicon Vineyard after he moved to Kelowna from Calgary, Alberta, in 1997.

What he had found was one of Canada's best-kept secrets: a thriving high-tech community of some 500 companies in a stunning region blessed with mountains, lakes and balmy weather. "A lot of people describe it as the nicest neighborhood in Seattle," Taylor joked.

A 4-hour drive east of Vancouver, the vineyard boasts 6 daily nonstop flights to Seattle, a high-tech sector expanding at a rate of 20-35 percent annually, and a GPD in 1997 estimated at $120 million, the same as the local forestry sector's. It's also on the telecommunications backbone running between Calgary and Vancouver, making bandwidth cheaper than in Seattle, Taylor said.

But the secret may be out of the bag now. Taylor said Workfire's acquisition raises the value of all the area's technology firms. "It's a credibility thing that says the engineers and infrastructure in this direction are up to world-class standards," he said.

Packeteer doesn't disagree. "The acquisition of Workfire really represents a major building block in Packeteer's strategy for Internet application infrastructure," said Todd Krautkremer, Packeteer's vice president of worldwide marketing.

Yankee Group analyst William Hurley said that while Packeteer's acquisition is a good fit with the company's existing business, Packeteer must still demonstrate that the solution will work on complex networks with many routing points.

John McConnell, principal analyst with McConnell Associates, called the Workfire application a feasible solution for the so-called "last mile," the difficult problem of extending the Internet's speed to users' desktops.